Greece on edge of default

Standard & Poor’s has reduced the long-term rating of Greece to SD (selective default) simultaneously with restructuring of debt announced by Athens, Interfax reports.

The rating change was a result of collective action clauses forcing swap and writing off of the notional value of securities and investors refusing to accept restructuring.

The process is expected to end on March 12, Greece’s rating may improve to CCC. Its rating has recently been at CC.

Investors will receive new securities with a nominal of 46.5% of the notional price of current bonds. Creditors will lose about 75%.

Fitch reduced the long-term rating of Greece from CCC to C. Realization of exchange of bonds will be a distressed debt exchange.

Greece is still at risk of hitting a default, Moody’s Investors Service said. A more detailed report will be published in the near future.

The German parliament approved a package of aid for Greece worth 130 billion euro. 496 MPs voted for, 90 against, 5 abstained. The final decision will be made at the EU summit at the end of this week.

Gold prices dropped on February 27, as a result of enforcement of the US currency, RIA Novosti reports.

Rohit Savant, an analyst of the CPM Group in New York, expects gold to gain support this week. $1800 per ounce may be exceeded.

April futures for gold at Comex (New York) dropped by 0.1% to $1774.90 per troy ounce. The dollar rate in the ratio of six main currencies increased from 78.34 to 78.54.

Christine Lagarde, IMF Managing Director, said that world economy has not reached a safe zone yet, although certain stability has been achieved.

Matt Riordan, manager of assets of Paradice Investment Management Pty., says that the higher price for oil the bigger pressure consumers get. Europe still has not decided on Greece’s payments.